Revealed: Seven's Internet Subscription TV Service

SYDNEY - Kerry Stokes' Seven Network is working on plans to deliver an ad-free subscription TV service via the Internet, network chief executive Tim Worner told the company's annual investor day in Sydney.

The move will become possible from mid-2014 when Seven plans to enter the hybrid broadcast broadband television (HbbTV) market, he said. HbbTV is an open standard, established by French and German interests, for network-enabled TVs and set-top-boxes.

It can show digital TV content from a number of sources including traditional broadcast TV, Internet and connected devices in the home.

Products and services using the HbbTV standard can operate over different broadcasting technologies including satellite, cable, or terrestrial networks.

Seven has apparently been attracted to the system by the growing number of Internet-connected and "smart" TVs now being sold in the Australian market, as well as by the number of people already watching catch-up services like the ABC's iView and Seven's own Plus7.

The hybrid service could challenge pay-TV services, currently dominated by Foxtel, but also including the Malaysian-based Fetch TV service offered by some ISPs including iiNet.

The reward for Seven, apart from subscription fees, would be the opportunity for the part-owned Yahoo!7 service and other digital units, to sell content directly to consumers, according to an Australian Financial Review report.

Stokes had a previous shot at this market with the TiVo set-top box, marketed for a time by a division termed - interestingly - Hybrid Television Services. But it was not a major success, and retail chains have stopped selling the box.

If established, the new Seven HbbTV project would apparently offer some services with ads, as well as an ad-free channel. The service is also planned to respond to viewers' preferences with program recommendations or targeted commercials.